Legendary Trader Edward O. Thorp on Beating the Stock Market and Blackjack

31st President of the United States, mentioned by Thorp as the sitting president when he was born.

Author of 'Fooled by Randomness,' 'The Black Swan,' and 'Antifragile,' who wrote the forward to Thorp's memoir, highlighting his restraint and independence.

TV personality and financial commentator mentioned as an example of common investment advice that deviates from long-term indexing.

An Institute professor and member of the National Academy of Sciences at MIT, who assisted Thorp with quick publication of his blackjack strategy and later collaborated on a wearable computer for roulette.

A number theorist from UCLA who was on the abstract committee of the American Mathematical Society and ensured Thorp's blackjack abstract was accepted.

Author of a book on aerobics and founder of a lab in Texas, credited with starting the aerobics revolution.

Bernie Madoff's brother, who was in charge of the fraudulent investment operation when Thorp tried to investigate.

Guest and author of 'Beat the Dealer,' 'Beat the Market,' and 'A Man for All Markets.' Known for contributions to blackjack and financial markets.

A great Swedish physical chemist from the 19th century who studied how atmospheric gases like carbon dioxide trap heat, contributing to global warming.

The person attributed with the mental model 'Tragedy of the Commons'.

Sterling Professor of Political Science at Yale, whose course and book 'The Wolf at the Door' explain how to achieve political implementation of rational solutions.

Author of 'Principles for Dealing with the Changing World Order', recommended for understanding current geopolitical crises.

Other general partner at Citadel with Ken Griffin and a long-time friend of Thorp.

Co-author of 'Beat the Market,' who was already practicing warrant valuation and helped Thorp develop the theory further.

Nobel Prize winner (with Robert Merton) and co-creator of the Black-Scholes model for option pricing, which highly influenced Thorp's strategies.

Co-creator of the Black-Scholes model for option pricing, influenced by Thorp's 'Beat the Market'.

Warren Buffett's business partner, known for his mental models and his book 'Poor Charlie's Almanack'.

Author of 'Thinking, Fast and Slow', whose work relates to how people make quick, often error-prone, judgments.

A young reporter who wrote an AP piece about Thorp's blackjack presentation, leading to massive press coverage.

The notorious fraudster whose Ponzi scheme Thorp uncovered in 1991 during a portfolio review for McKinsey & Company.

Famed investor who Thorp met through a dean at UCI; Thorp predicted he would become the richest man in the world and was later an investor in Berkshire Hathaway.

Author of 'Catch-22,' who famously understood the concept of 'having enough' wealth, unlike many who endlessly chase it.

Co-recipient of the Nobel Prize for economics with Myron Scholes for his work on option pricing theory, alongside Black and Scholes.

Mentioned by the host for his fantastic writing relevant to geopolitics and societal issues.

Physicist used as an example of independent thinking, standing against popular opinion on the speed of light.

Known for a 50-item collection of mental models widely available online, mentioned by Thorp.

Founder of Citadel, who Thorp invested with from the start, providing him with insights and resources.

Founder of Renaissance Technologies, known for its extraordinary quantitative investment success.

Author who recounted Joseph Heller's story about 'having enough' in The New Yorker.

University where Edward Thorp eventually taught and met Sheen T. Kassouf.

An organization where Bernie Madoff was a pillar, past president, and committee member, granting him an air of credibility.

University where Edward Thorp pursued his undergraduate studies.

Institution where Edward Thorp taught and used early computers to develop his blackjack system.

Opened in 1973, Thorp's traders were initially the only ones on the floor exploiting their advantage with options pricing.

University where Edward Thorp taught after MIT.

The museum in Cambridge where Thorp and Shannon's wearable computer for roulette is now exhibited.

University where Edward Thorp received his bachelor's and master's degrees in physics and later taught.

Magazine where Kurt Vonnegut wrote about Joseph Heller and the concept of 'having enough.'

The institution through whose proceedings Edward Thorp sought quick publication for his blackjack research, facilitated by Claude Shannon.

Mentioned as an example of a political body facing difficulty in implementing its agenda, illustrating the need for effective coalition-building.

The society at whose meeting in Washington D.C. Edward Thorp presented his blackjack abstract, initially rejected.

The lab that recognized Thorp and Shannon's device as the first wearable computer.

An organization that freezes people cryogenically and consulted Thorp for advice on investing their endowment fund for long-term growth.

A consulting firm whose portfolio Thorp was invited to review in 1991, uncovering the Madoff fraud.

Brand of expensive tire on Thorp's Tesla.

A textile company that Warren Buffett transformed into his private mutual fund, eventually becoming a highly successful investment vehicle.

An investment bank whose vice president helped Thorp research Madoff's suspicious option trades.

Thorp's wildfire insurance provider, which provided a water truck to protect his and his neighbors' properties during a wildfire.

Edward Thorp's hedge fund, whose operating plan was later emulated by Ken Griffin's Citadel.

A private hedge fund operation known for its spectacular, highly successful, risk-adjusted performance using quantitative methods.

A hedge fund founded by Ken Griffin, where Thorp was an early investor before exiting due to tax inefficiency.

A gas discussed in relation to Svante Arrhenius's work on global warming and as a negative externality from car pollution.

Financial derivatives related to the S&P index, which were part of the mysterious trades in the Madoff fraud.

A mental model in economics referring to unintended consequences of an action, often negative (like pollution) but sometimes positive (like fire insurance benefits to neighbors).

Common stock purchase warrants, which were forerunners to options, and what Thorp learned to value mathematically.

An academic theory claiming one cannot consistently 'beat the market,' which Thorp argues can be overcome with substantial work and mathematical insights.

A mental model by Garrett Hardin, illustrating how individuals acting in their own self-interest can collectively deplete a shared resource.

A proposed rational and logical solution to pollution, where taxing carbon emissions would reduce their presence in the atmosphere.

A mathematical model for valuing warrants and options, developed by Fisher Black and Myron Scholes, which improved upon Thorp's early ideas.

A program that has remained in place due to a strong, embedded constituency, illustrating a successful political implementation.

The scientific phenomenon explaining how gases in the atmosphere trap heat, made obvious by sitting behind a plate glass window in the sun.

A human tendency from sociology and psychology to make assumptions not fully justified by evidence, often quickly and emotionally, which can lead to mistakes but also save lives (e.g., reacting to a roar).

Edward Thorp's memoir, detailing his journey from Las Vegas to Wall Street.

A book recommended for learning more about Jim Simons, although his quantitative approach is hard to emulate.

One of Nassim Nicholas Taleb's influential books, exploring systems that benefit from disorder.

Edward Thorp's bestseller that revolutionized the game of Blackjack.

Joseph Heller's famous book, alluded to in a story about wealth and satisfaction.

Edward Thorp's book, co-authored with Sheen T. Kassouf, which influenced securities markets globally.

Charlie Munger's book containing many valuable mental models.

One of Nassim Nicholas Taleb's influential books, discussing the impact of highly improbable events.

Daniel Kahneman's famous book on two systems of thought, tied into the concept of fundamental attribution error and quick, instinctive reactions.

A book by Ian Shapiro that explains how to form winning political coalitions and implement policies that endure.

Ray Dalio's book, recommended by Thorp for its insights into geopolitical shifts, including the rise of China and potential decline of the U.S.

One of Nassim Nicholas Taleb's influential books, related to understanding chance and risk.

An early mainframe computer from 1959 that Thorp used at MIT for his blackjack calculations.

The city where Edward Thorp first experimented with blackjack and realized he could devise a winning system.

Mentioned as Thorp's car, requiring an expensive Michelin tire replacement due to a flat from construction debris.

An example of a tangible item that can cause a negative externality by causing a flat tire.

Discussed as an emerging empire in the context of global geopolitics and changing world order.

Discussed in the context of potentially declining as an empire, necessitating adaptation to retain global influence.

Mentioned as a source of online content, specifically a 50-item collection of mental models from Elon Musk.